NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT
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No. 10-3877

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JOHN MARQUESS, ADMINISTRATOR OF THE ESTATE OF WILLIAM MARQUESS,
DECEASED; JASON MARQUESS
v.
PENNSYLVANIA STATE EMPLOYEES CREDIT UNION,
Appellant

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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
(D.C. No. 09-cv-04256)
Magistrate Judge: Honorable Jacob P. Hart
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Submitted Under Third Circuit LAR 34.1(a)
April 29, 2011
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Before: BARRY, HARDIMAN and TASHIMA, * Circuit Judges
(Opinion Filed: May 12, 2011)
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OPINION
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Honorable A. Wallace Tashima, Senior Judge of the United States Court of Appeals
for the Ninth Circuit, sitting by designation.

TASHIMA, Circuit Judge

The Electronic Fund Transfers Act (EFTA) and its implementing regulations
impose, in certain situations, liability on banks for unauthorized electronic fund transfers
(EFTs) drawn against their customers accounts. 15 U.S.C. 1693 et seq.; 12 C.F.R.
205.6 et seq. The question is whether the EFTA applies to bank accounts opened through
forgery.
After a bench trial, the District Court made factual findings that neither party
challenges. William Marquess, now deceased, opened a bank account at Pennsylvania
State Employees Credit Union (PSECU) in the name of his adult son, Jason, by forging
Jasons signature. William never told Jason about the forgery or the account. William
used his own Philadelphia address for the account instead of Jasons Florida address.
Later, William made himself a joint holder of the account by forging Jasons signature on
another form. Later still, William authorized electronic transfers from the joint
Jason/William account to an account in the name of David Marquess, Williams other
son, by forging Jasons signature on yet another form.
When William died, the joint Jason/William account held over $25,000, although
Jason still had no idea that the account existed. David, however, learned of the account
through a letter that PSECU sent to Williams home. David then called PSECU,
impersonated Jason, obtained the accounts PIN number and on-line banking password,
and stole the $25,000 balance. When Jason finally learned what had happened after

receiving notice that he owed inheritance tax on the joint account, PSECU refused to
refund the stolen money.
Williams estate and Jason sued PSECU for violation of the EFTA and breach of
contract. The district court found for Jason on the EFTA claim, but found for PSECU on
all other claims. PSECU appeals. We have jurisdiction under 28 U.S.C. 1291. We
review the district courts findings of fact for clear error and its conclusions of law de
novo. Feesers, Inc. v. Michael Foods, Inc., 591 F.3d 191, 194 (3d Cir. 2010).
Under the Federal Reserve Boards official staff interpretation, the EFTA does not
apply unless the consumer has entered an agreement for EFT services:
1. Accounts covered. The requirements of the regulation apply only to an
account for which an agreement for EFT services to or from the account has
been entered into between:
i. The consumer and the financial institution (including an account for which
an access device has been issued to the consumer, for example);
ii. The consumer and a third party (for preauthorized debits or credits, for
example), when the account-holding institution has received notice of the
agreement and the fund transfers have begun.
12 C.F.R. Pt. 205, Supp. I 205.3. We credit this interpretation because it is not
demonstrably irrational. Chase Bank USA, N.A. v. McCoy, 131 S. Ct. 871, 882 (2011)
(quoting Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 565 (1980)); Aronson v.
Peoples Natural Gas Co., 180 F.3d 558, 563 (3d Cir. 1999). Only subsection (i) of the
interpretation applies to this case, because the unauthorized transfer did not involve
preauthorized debits or credits by a third party.
3

No agreement for EFT services existed between PSECU and either Jason or
William. Obviously Jason never entered any such agreement; he did not even know that
the account existed until after David stole the money. As for William, he purported to
establish an EFT agreement by forging Jasons signature on the PSECU form, but this
agreement like the antecedent account-opening agreement was forged and is therefore
void. See Tonkin v. Tonkin, 94 A.2d 192, 196 (Pa. Super. Ct. 1953) ([T]he legal effect
of [forgery] is to void the instrument.); FDA Packaging Inc. v. Advance Personnel
Staffing, Inc., 73 Pa. D. & C. 4th 420, 430 n.4 (Ct. Com. Pl. 2005) (Void contracts
generally arise in cases of forgery of a partys name or unauthorized execution of an
agreement on behalf of another party.).
Plaintiffs argue, incorrectly, that PSECU somehow created an agreement with
Jason by treating him as the account owner after Williams death. One cannot, however,
ratify a contract that never existed. Long v. Sears Roebuck & Co., 105 F.3d 1529, 1535
n.10 (3d Cir. 1997).
Because no agreement existed between any plaintiff and PSECU, the EFTA does
not apply. See 12 C.F.R. Pt. 205, Supp. I 205.3 (1)(i).
CONCLUSION
Accordingly, we will reverse the judgment of the District Court against PSECU.